Whew!!! The National Debt Ceiling was extended today by the House and Senate, through March 15, 2015, and the President will undoubtedly sign it very quickly. It is important to remember, however, that the overwhelming majority of Republicans, in both Houses, voted against it. In the House, Speaker John Boehner (R-OH) and Majority Leader Eric Cantor (R-VA) signed it, along with 25 others from the GOP. 199 Republicans and two Democrats, however, voted against it. In the Senate, only Minority Leader Mitch McConnell (R-KY), Minority Whip John Cornyn (R-TX) and three other Republicans signed it, while the rest did not. What were they possibly thinking?
As I have written before, the Financial Markets don’t know how to handle uncertainty. If the U. S. were to default on its Debt, I believe that World Trade would almost stop, and Investments in Business and World Economies could stop functioning as everyone hoarded Cash. Even then, they wouldn’t know what any currencies would be worth in the future. Oil, which propels many economies, would probably stay in the ground as Oil Contracts, which are generally denominated in U. S. Dollars, would be highly questionable.
The purpose of this Blog Post is not to predict Doom and Gloom, and I am not suggesting that “The Sky is Falling”. Rather, I would like to point-out the Lunacy of many in Congress–even Paul D. Ryan (R-WI), Chairman of the House Finance Committee–in acting without forethought, but merely by keeping Politics and Ideology foremost in mind.
If we Default on our National Debt, America would not be able to pay its Bills for goods and services that it has already spent, and had been already appropriated by Congress. Now, I realize that we still have The size of the $17 Trillion National Debt to contend with. Unfortunately, Congress and Administrations always seem to deal in ten-year terms, figuring that no one will remember then what any of them said today, how they voted and, perhaps they might not even be in Office when the Chickens Come Home to Roost.
President Barack Obama and the Congress have already significantly reduced the current Budget Deficit and, HOPEFULLY (CAPs, huh?) future Presidents and Congresses will continue to do so. For instance, in order to spite the President when he first took Office in 2009, Conservatives in Congress would not authorize the full package of desperately-needed Infrastructure Projects, which most economists said needed to be much larger. The potholes are still there, highways are still sliding further into disrepair and bridges continue falling down.
Republicans have always despised the Legacy of President Franklin D. Roosevelt who raised this Country out of the Great Depression by creating Infrastructure Jobs. Such jobs put money into the Economy and created even more jobs and higher Tax Rolls. Corporations and the Financial Markets have surely come back from the Financial Abyss of the Great Recession (4Q07-1Q09), but the Working Class and Consumer Spending have not. And, the One Percent continues to complain that they are unfairly labeled. Hey, if the shoe fits…?
In my next Blog Post, I will discuss the National Debt. Remember that this was not a big concern when President George W. Bush took the Country into two Unnecessary Wars in the Middle East. And, Congress wrote him a blank check and let his Administration do so without appropriating the necessary Hundreds of Billions of Dollars to do so. Perhaps we were all too busy wondering what color Emergency Flags were flying that week. Remember them?